FMC

Paper Pencil

Overview

Product Idea and description
  • A natural, eco-friendly, biodegradable, organic substitute of Graphite pencil.
  • Can be set up as household manufacturing unit.
Target group
  • B2B and B2C
  • NGO, Publishing company, Marketing Agency, School
Raw material required
  • Recycled News Paper, Recycled paper
  • Recycled color paper
Production capacity, facility and labor required
  • Small unit – Production capacity 2 lakh pcs/ per month and involving 10manpower (9 workers & 1 engineer) require approx.400 sq. ft space
Production Process
  • Collecting piece of paper/ newspaper, paper cutting, core sticking, rolling, drying, cutting & polishing
Tools &Equipment’s required for production and prices
  1. Rolling Machine- INR1,30,000
  2. Cutting Machine- INR 80,000
  3. Rubbing Machine- INR 1,20,000
  4. Velvet Coating Machine-INR 23,000
  5. Oven-INR 93,600
  6. Stamping Machine-INR 16,000
  7. Ferrule Machine-INR 1,50,000
Financial linkages/ Government schemes
  • Regional Banks or FIS.
  • PMEGP, SIDBI etc
Pricing Strategy
  • INR2.5
Package, storage and transportation requirements
  • Final product is packed wooden box forlogistic.
  • Finishedpaper pencilshould be stored in dry places
Marketing strategy

India Stationery market holds tremendous growth potential as the country has nearly 22-24 crore students studying and requiring notebooks and other stationery materials. Increasing number of schools and offices, improved standard of living as well as shift in focus from inexpensive to premium quality products on account of rapidly burgeoning economy are some of the crucial factors which would drive the demand for stationery products in India over the next six years. Further, government initiatives such as National Policy on Education and Sarva Shiksha Abhiyan to ensure low cost and quality compulsory education for all would also spur the growth of stationery market in India.

India stationery market revenues are projected to grow at a CAGR of 10.5% during 2018-24.
In India, major demand for stationery products is generated from education sector due to increasing enrolment of students in schools and higher educational institutions. Further, growing e-commerce industry in the country is also contributing to rising sales of stationery products. Office segment is the second highest consumer of stationery products and is anticipated to register healthy growth during the forecast period due to growing demand for
Stationery products in the service sector List of Item used in stationary which can replace by recycled process. Item used in stationary.

Existing Product

Option available to Replace

Ledger Register (Rexin)

Seeds paper

Paper Weight

Bamboo

Pencil

Recycled newspaper pencil

Pen

Plastic body replace by Recycled paper

Pen stand and Pen

Bamboo

Pad (hand pad)

Seeds paper

Rolling Register

Seeds paper

Rolling Paper

Seeds paper

Stamp pad

Seeds paper

Steno Book

Seeds paper

 

Distribution Channel
  • E-commerce, local retailers, buyers.

Production stage

Product SWOT Analysis

Strengths

Weaknesses

Opportunities

Threats

  • Easy to obtain waste paper in any quantity
  • Eco-friendly, natural & organic and reusable.
  • Perfectly sustainable alternative to fresh wood and plastic
  • Durable and robust
  • Require less skilled workforce to operate hand tools and small equipment.
  • Low cost of set-up
  • Lack of knowledge for production process and final finishing of the product
  • Prone to damageif exposed to moisture
  • High demand from schools, offices, institutions, students, etc
  • High export potential
  • E-commerce platforms viz. Amazon, Flipkart
  • Alternatives available such as wood and plastic

Financial Plan

To start the paper pencil manufacturing business, one can invest 15.58L INR with a working capital requirement of 1.57L INR per month, assuming the working capital cycle is 25 days and runs for a total of 8 work hours in a day.

Financial Summary Sheet:
S.No Parameters Unit Value
1 Capital Cost INR 1558860
2 Working Capital INR 1893600
3 Total Cost of Investment INR 3452460
4 Sales INR 6000000
5 Gross profit INR 2547540
6 Tax @ 30% INR 764262
7 Net Profit INR 1783278
8 Pay Back Period (Total Investment/Net Profit*12) Months 23
Capital Cost:
S.No Parameters Value
1 Land & Building 800000
Machinery & equipment
2 Rolling Machine 130000
3 Cutting Machine 80000
4 Rubbing Machine 120000
5 Valvet Coating Machine 23000
6 Oven 93600
7 Stamping Machine 16000
8 Ferrule Machine 150000
9 Electrification & Installation @ 10% cost of machinery 61260
10 Pre-Operative Expense 50000
11 Cost of Office Equipment 35000
12 Total Capital Cost 1558860
Working Capital:

S.No

Parameters

INR/Unit

Value

1

Workers (10 No.)

8000

80000

2

Manager (1 No.)

15000

15000

Raw Material & Utilities

3

Raw Material

25800

4

Utility per Month

10000

5 Water 1500

Other Contingent Expenses

6 Repair & Maintenance 1000

7

Transportation

5000

8

Telephone

1000

9

Other Consumables

1000

10

Advertisement & Publicity

5000

11

Postage & Stationary

500

12

Insurance

10000

13

Miscellaneous Expenses

2000

14

Grand Total of Working Capital (1 Year)  

1893600

Turnover Calculation:

S.No

Parameters

Unit

Value

1

Production per Month

Pieces

20000

2

Selling Price per Product

INR

2.5

3

Turnover per Month

INR

500000

4

Annual Turnover

INR

6000000